The Reaction of Central Banks to the Economic Crisis Caused by the Covid-19 Pandemic
The purpose of the article is to highlight the monetary policy measures adopted by the world’s central banks as a reaction to the economic crisis caused by the Covid-19 pandemic. The monetary policy strategies and instruments used and the effects of their application have been analyzed separately at each stage of the pandemic and in different geographical areas, starting with 11 March 2020, when the World Health Organization (WHO) declared Covid-19 a global pandemic, continuing with the next strict shutdown two months to a gradual relaxation of restrictions and the attempts to economic recovery, ending my analysis with the second wave of infections spread from mid-July. The article presents how the central banks’ monetary policy measures and its different transmission channels have responded to a rapidly growing global demand for liquidity. In the addressed issue we used a quantitative research method based on the collection of a large number of numerical data from a wide variety of statistical sources, their classification, and calculations made with them. The results are presented in graphic form and show the cause- effects relationship between the studied variables.
Benmelech, E., Tzur-Ilan, N., (2020). The Determination of Fiscal and Monetary
Policies during the COVID-19 Crisis, Working Paper 27461.
Central Bank of Brazil. The Financial Stability Report, Volume 19/ issue No1/April 2020
Cerna, S. (2014). Politica monetară. Monetary Policy, Bucharest, Publishing House of Romanian Academy, pp.136-139.
ECB Statistical Data Warehouse https://sdw.ecb.europa.eu/reports.do?node=10000030
European Central Bank
Frankel, J., Schmukler, S.L., Serven, L. (2004). Global transmission of interest rates: monetary independence and currency regime, Journal of International Money and Finance, 23(5), pp. 701-733.
Gregora, J., Melecky, A., Melecky, M. (2019). Interest Rate Pass-Through: A Meta-Analysis of the Literature. Policy Research Working Paper, 8713. World Bank, Washington DC, pp.4 -7.
International Monetary Fund. Outlook for Latin America and Caribbean: An Intensifying Pandemic
International Monetary Fund. World Economic Outlook, October 2020: Along and Difficult Ascent
International Monetary Fund. Policy Responses to Covid-19
Jannsen, N., Potjagailo, G., Wolters, M., H. (2019). Monetary Policy during Financial Crises: Is the Transmission Mechanism Impaired? International Journal of Central Banking, Vol. 15 No. 4, pp.111.
Monnet, E., Vari, M. (2019). Liquidity Ratios as Monetary Policy Tools: Some
Historical Lessons for Macroprudential Policy, IMF Working paper 19/176.
Monetary Policy Report-June 2020
Nuguer, V., Powell, A. (2020). Policies to fight the Pandemic, 2020 Latin American and Caribbean Macroeconomic Report
Outlook for Latin America and the Caribbean: An Intensifying Pandemic
Rădulescu, M., Dascălu, N. (2009). Monetary Transmission Channels in Romania-
The Credit Channel, Annals of the “Constantin Brâncuși” University of Târgu Jiu, Economy Series, Nr.3/2009, pp. 77.
Taylor, J. B. (1995). The monetary transmission mechanism: An Empirical Framework. Journal of Economic Perspectives, 9 (4), pp. 14-26.
The National Institute of Statistics and Censuses (INDEC)
Thomas, C., (2013). An Encyclopedia of Keynesian Economics, 2nd edition, Edward Elgar Publishing Limited, Cheltenham, UK, pp. 90-93.
Copyright (c) 2020 Sorina Botiș
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
The author fully assumes the content originality and the holograph signature makes him responsible in case of trial.